Highlight steals SXSW: Is this the first ambient reality app that works?

It’s safe to say that Highlight has stolen SXSW. The app has single-handedly taken a firm grip over a yet-to-be-defined new social genre: it’s called SoMoLo (social, mobile, local), ambient social, ambient local, or even just the vague and all-encompassing “ambient reality.”

Whatever you want to call it, SXSW Interactive week has been a springboard for Highlight — and that’s putting it very, very mildly. “It’s been huge,” creator Paul Davison tells me. (Full disclosure: I obsessively checked Highlight to see when he arrived at our meeting place). “At the same time, [SXSW] creates this artificial state of ubiquity, because everyone here is using it.”

They most certainly are. During my hour-long conversation with Davison, who formerly worked for a structured database company called Metaweb (acquired by Google in 2010), I watched the app reveal some 20+ others in the coffee shop using Highlight. Davison even pointed out someone a table away showing the app to a colleague. “That’s so awesome!” he laughs.

Everywhere you go at the show, you see heads downturned toward their phones — which is nothing new for what many call “Spring Break for nerds.” We’re all furiously checking in to everything and checking out everyone there. But this year, Highlight has been the location and social discovery app of choice.

Before talking about Highlight’s updates and momentum, we discussed this sudden attention to SoMoLo (or whatever you want to call it). “It’s a number of things coming together,” Davison says. “Smartphones are everywhere, Facebook is ubiquitous, all this data is in the cloud and it’s all highly recognizable, the ability to run mobile apps in the background is fairly new, push notifications, battery life is just now barely good enough and it’s only getting better.”

As is Highlight. A few updates have really fine-tuned the simple application, which uses your smartphone’s location data and your Facebook account to find people who have similar friends and interests, and happen to be in your general vicinity.

“The main thing we added was ability to see who’s nearby right now,” Davison says. Before you would see someone who was nearby moments ago — it wasn’t necessarily clear if they were still near you or had just left. Now at the top of the activity you see people who are still there, and people who have left are time-stamped and fall under those currently around you.

The new app also features the option to search for someone specific, the ability to follow someone on Twitter, or friend someone on Facebook immediately from within the app, and a redesigned, cleaner navigation dash.

But the biggest change, appropriately, is the ability to Highlight someone: The idea is like bookmarking a person you think is interesting or want to mentally note. “We thought about that a lot,” says Davison. “Highlight is so passive, and there’s no currency — no friend adding, which is what everyone wants from a social application. In most cases, a follow is a person saying, ‘I’m consuming content generated by you. I want your content.’ And that makes sense for most social products.

“But for us, the people are the content. Feed is determined by who’s around you. So following doesn’t make sense. At the same time, there’s room for interaction. We wanted something really lightweight. It sort of serves — and I hate saying this — like a ‘poke’ or a ‘nudge.'”

Davison says there was much discussion about the visibility of a Highlight. They are completely public: you see it, the highlighted person sees it, everyone who ever sees your profile sees it. Ultimately, it was decided that making this information entirely public kept the app close to it goal of connecting — not individuating — users.

Highlight isn’t the first ambient social app to spark privacy concerns. Last year, when photo app Color launched, the reaction was palpable: While people were intrigued by its technology, the security implications overwhelmed users. Highlight has been no exception; it’s even been called the ‘stalker app.’ The company also doesn’t have a privacy policy page on its website to explain its guidelines.

“Privacy is a huge thing and we think about it all the time,” Davison tells me. “This sort of thing is just new and if people have anxiety about it then that’s okay, because it’s unfamiliar. It happened with the Web before… it happened with Facebook. The ability to share information with the people around you in this really sort of ambient way is new. And the reason that seems weird is that we haven’t been able to do it before. We’re not used to that level of openness and sharing.”

Highlight uses the iPhone default privacy policy, Davison tells me.

Regarding the ill-fated Color, Davison says he “thought the ideas behind it were really cool, and I still do. It’s a similar concept and it was intended to be a way to help you learn about the people around you. I feel like with these sorts of products the details matter a lot. User interface, interaction, tiny differences.” He also references the app’s other insurmountable problem. “With hyper-local, there’s been this tremendous problem of getting users. You open up the app, no one is there, you have a bad experience with it, and you’ll never use it again.”

Color was based on actions — users taking pictures, he explains. And he’s right, there’s no passive way to use the app. Highlight is attempting to avoid this particular issue by encouraging a browsing experience and telling people to get out of the app: The welcome screen gets your info and then tells you to close the app until later.

The other elephant in the room concerning Highlight is battery life. Running an app in the background is power consuming — but maybe not for long. According to Davison, every new release of Highlight improves battery life, and it should cease to be a problem in less than a year.

Davison seems to have this same confidence — almost ambivalence — toward every obstacle in Highlight’s way. “It’s all do-able. All solvable,” he says about any every potential hangup.

“What we have right now is this tiny, tiny, tiny fraction of where we know we can take this and it’s really exciting,” he says. “The app is going to get smarter. There’s all this math that’s going to make it better and better.”

And that’s where I offered him my Highlight wish list — the ideas that you could message everyone using the app within 900 square feet simple questions like “What Wi-Fi network is working best for you?” or “Is anyone going uptown and want to share a cab?” (these are clearly SXSW issues) even earned me a high five. I also complained about not being able to edit my photo, which didn’t format correctly, and he says facial recognition technology or a photo edit tool could be implemented to fix this.

At the moment, Highlight is small — two people, including Davison, to be exact. So the building will come fast and furious. And listening to Davison, it sounds like the sky is the limit. “It’s going to change everything — there’s a reason so many [developers] are doing this: It’s a really big deal,” he says. “There have been all these moments happening — someone in the room who knows your sister, or someone you have 46 friends in common with. That’s always been true but we haven’t had the technology to discover them.”

But now we most certainly do, and it isn’t going to stop. Davison talks about building a function so Highlight knows when you’re traveling, and can identify people on the train or bus with you, or knows when you’re away from home to notify you if someone who happened to go to the same high school as you is nearby. The instances of what this thing can do (or will soon do, as Davison insists) are never-ending, really. He sums it all up nicely: “We’re building the sixth sense.”

The real test comes now. We’re all leaving SXSW, and with it the company of fellow app nerds among us. But if Highlight can use this spotlight and keep user engagement, then we could be poised for the next big step in the social evolution.